RRRREEEENNNNEEEEWWWWAAAABBBBLLLLEEEE EEEENNNNEEEERRRRGGGGYYYY

iiiinnnn AAAAMMMMEEEERRRRIIIICCCCAAAAMichael T. Eckhart

President, Solar International ManagementPresident, American Council On Renewable Energy

2ND World Renewable Energy ForumMay 29-31, 2004Bonn, Germany

2

U.S. Energy Consumption by Fuel 2002

Coal 23%

Petroleum 39%

Renewable 6%

Natural Gas 24%

Nuclear 8%

Wind 2%

Biomass 46%

Hydroelectric 46%

Geothermal 5%

Solar <1%

Source: AEO 2004 tables (released in December 2003) based on US energy consumption. Overallbreakdown Table A1 (Total Energy Supply and Disposition),and Renewable breakdown Table A18 (Renewable Energy, Consumption by Section and Source). Source: NREL

3

Key Challenges for Energy Supply

FINRES ECON RISK ENVIR

RENEWABLES + 0/- + +

NUCLEAR ? + - +/-

COAL + + - -

NAT GAS - +/? ? +/-

Source: American Council On Renewable Energy, 2003

4

Key Challenges for Energy Supply

FINRES ECON RISK ENVIR OVERALL

RENEWABLES + -/+ + + - +

NUCLEAR ? + - +/- - ?

COAL + + - - + -

NAT GAS - +/? ? +/- + ?

Source: American Council On Renewable Energy, 2004

5

Petroleum supply, consumption, and imports, 1970-2025(million barrels per day)

Source: DOE/EIA-0383(2003) Annual Energy Outlook

US Oil Imports

6

Changes in Atmospheric ConcentrationCO2, CH4, and N20 Ð A Thousand Year History

Source: NREL

Source: IPCC Third Assessment Report (2001)

Atm

osph

eric

con

cent

ratio

n N

2O (

pbb)

310

290

270

2501000 1200 1400 1600 1800 2000

Atm

osph

eric

con

cent

ratio

n C

O2

(ppm

)

360

340

320

300

280

260

1000 1200 1400 1600 1800 2000 1000 1200 1400 1600 1800 2000

The Timefor ResponsibleAction is Now

7

Renewable Energy in America

Resource Potential

SOLAR ENERGY WIND POWER

GEOTHERMAL

Regional: Renewable Energy Resources Economics PoliticsYields Sate-Based Solutions

8

Renewable Portfolio Standards

Non-punitive goals

PA: varies by utility

*NJ : 4.0% by 2008

*CT: 4% by 2008

MA: 4% by 2008WI: 2.2% by 2011

IA: 105 MW

MN: 1,125 MW wind by 2010

TX: 2,880 MW by 2009

*NM: 10% by 2011

*AZ: 1.1%by 2007

CA: 20%by 2017

*NV: 15% by 2013

ME: 30% by 2000

RPS in utility settlements

State RPS

Source: IREC, DSIRE Database

9

Public Benefit Funds for Renewables

$127 M

$85 M

$80 M

$22 M

$111 M

$2,048 M

$95 M

$10 M

$234 M

$20 M

RI: $10 M

MA: $383 M

NJ: $279 M

DE: $11 M

CT: $338 M

Cumulative 1998 - 2012

15 State Funds =$3.8B by 2012

Source: IREC, DSIRE Database

10Source: IREC, DSIRE Database

Corporate Tax Credits & Deductions

Multi-technology

UT:10%

Credit$50 K

OK:$0.0050 per

kWh10 yrs. (> 50

MW)RE Fuels/Vehicles

MD:20-30% GB

Credit

NC:35% Credit

$250 K

11

Personal Tax Credits

Multi-Technology

NC: 35%$10,500

CA:7.5%

MD: 15%$2,000

NY: 25%$3,750

RE Fuel Vehicles

HI: 20 – 35%

AZ: 25%$1,000

MT: $500

RI: 5%

Source: IREC, DSIRE Database

12

Net Metering Rules

State-wide net metering for certainutility typesNet metering offered by one or moreindividual utilities

Net meteringis available in

38 states +D.C.

Source: IREC, DSIRE Database

13

PV Grants & Rebates

$3.20

SE-PA:$4/W+

$1/kWh for1 yr.

$5

25%

$3.90/$2.25

$4$5-6

50%

$2 $4-5

( $/W or % of costs)

$5.50

Utility PV RebatesSource: IREC, DSIRE Database

US Wind Energy

15

U.S. Wind EnergyU.S. Wind - Installation by Year

0

200

400

600

800

1000

1200

1400

1600

18001

98

1

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

MW

Source: AWEA

16

Where? Ð Installations by period by state

1980-1995

Total: 1,493 MW

1996-2003

Total: 4,891 MW

CA(1,413)

TX (35)

MN (35)

> 1000 MW

300 Ð 1000 MW

100 Ð 300 MW

10 Ð 100 MW

TX(1,258)

CA (630)

MN(539)

IA(472)WA

(244)OR(260) WY

(285)CO(223)

NM(207)

KS (114)PA(129)

OK(176)

Source: AWEA

17

1980-1995

Kenetech USWP

0 500 1000 1500 2000 2500MW

Sales of Wind Turbines in the U.S.

1996-2003

Vestas

Zond

Mitsubishi

Bonus

Gamesa

NEG Micon

Enron Wind GE Wind

0 500 1000 1500 2000 2500

MW

Source: AWEA

18

U.S. Major Wind Farm Developers(> 100 MW)

Developer MW installed

¥ FPL Energy 2,583

¥ GE Wind 529

¥ AEP 316

¥ Cielo Wind Power 238

¥ Shell Wind/ Shell Renewables 232

¥ Zikha & Midwest Renewable 154

¥ Edison Capital 123

Source: AWEA

19

U.S. Wind Energy

Source: AWEA

U.S. Wind - Cumulative Capacity

0

1000

2000

3000

4000

5000

6000

7000

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

MW

US Solar PV

21

PV Applications

Substation - Sacramento, CACarport - Austin, TX

Grid-Connected with EV Charging

22

Example Calculation Ð Simple Payback

Residential Rooftop2.5 kW$8.00/Wac Installed$20,000Best location4,800 kWh/year

PAYBACK (Years)

1. No Incentives 103 Ð 207

2. Net Metering 28 Ð 42

3. 50% Buy-Down 14 Ð 22

4. Tax Abatements 12 Ð 15

5. Green Tags 11 Ð 14

6. Enviro Values 5 - 10

23

PV on Commercial Buildings

BIPV - 4 Times Square, NYC

Commercial Rooftop - Boston, MA

24

Photovoltaic Building Economics: Comprehensive Perspective

$0$50,000

$100,000$150,000

$200,000$250,000

$300,000$350,000

$400,000$450,000

$500,000$550,000

$600,000$650,000

1 3 5 7 9 11

13

15

17

19

21

23

25

27

29

31

Ben

efits

in $

State Credit

Depreciation

Fed Tax Credit

Roof Mat'l Value

HVAC Savings

Demand Savings

Energy Savings

8 Year Payback w/ no financing

1 Year payback with 20% down, 80% financing

PV Financing Ð Commercial Rooftop

25

Photovoltaic Building Economics: Comprehensive Perspective

$0$50,000

$100,000$150,000

$200,000$250,000

$300,000$350,000

$400,000$450,000

$500,000$550,000

$600,000$650,000

1 3 5 7 9 11

13

15

17

19

21

23

25

27

29

31

Ben

efits

in $

State Credit

Depreciation

Fed Tax Credit

Roof Mat'l Value

HVAC Savings

Demand Savings

Energy Savings

8 Year Payback w/ no financing

1 Year payback with 20% down, 80% financing

PV Financing Ð Present Value Driven

26

U.S. PV Applications

PV Shipments by Market Sector

0

20,000

40,000

60,000

80,000

100,00019

89

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

kWp

Other

Electric Utility

Transportation

Industrial

Government

Commercial

Residential

Source: EIA

US Ethanol Production

28

Fuel Ethanol Production

U.S. Fuel Ethanol Production

0

500

1000

1500

2000

2500

3000

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Mill

ions

of

gallo

ns

Source: Renewable Fuel Association

29

Ethanol Production Capacity by State

> 500 million gallons per year (mgy)

250 Ð 500 mgy

100 Ð 250 mgy

IA 867IL796

NE 537

SD 422

MN392 WI

172

KS 110 MO100

IN95

TN 65

MI45

ND 34

KY 24

NM 15

Total Production Capacity: 3,699 million gallons per year

Source: Renewable Fuel Association 10 Ð 100 mgy

30

Major U.S. Fuel Ethanol Producers

Producer State Capacity Share(mgy)

Archer Daniels Midland IL/IA/NE 1,070 32%/MN/ND

Aventine Renewable Energy IL/NE 135 4%Cargill, Inc NE/IA 118 4%VeraSun Energy Corp SD 100 3%New Energy Corp IN 95 3%Abengoa Bioenergy Corp NE/KS/NM 85 3%MGP Ingredients, Inc IL/KS 78 2%A.E. Staley TN 65 2%Chief Ethanol NE 62 2%AGP NE 52 2%

Source: Renewable Fuel Association, May 2004

31

U.S. Clean Fuel Requirements

CARB Phase 2 RFG

Federal Oxygenated Fuel

Federal RFG

State Fuel Program

Source: Clean Fuels Development Coalition

32

Ethanol Represents Small Sliverof U.S. Petroleum Pie

Billions of Gallons per Year

134.3

Ethanol3.0

Gasoline Ethanol

33LS-CD-b136501

18801860

1500

0

1000

1500

1900 1920 1940 1960 1980 2000 2020 2040 2060

Surprise

Geothermal

Solar

New Biomass

Wind

Nuclear

Hydro

Gas

Oil & NGL

Coal

TraditionalBiomass

Royal Dutch ShellSustained Growth Scenario

1996

Exa

joul

es

World Energy Supply Scenario

Source: Royal Dutch Shell, 1995.

TODAY

34

All Renewables Targets% Total Renewables

0%

10%

20%

30%

40%

50%

60%

1990 2000 2010 2020 2030 2040 2050 2060

Global Perspectives A3 Germany

Today (Global) IEA World Energy Outlook Ref

Shell Dynamics (Global) European Union

Navigant (Global) Today (US)

Pew Tech Triumphs Policy (US) Aitkin (US)

GHG (Hoffert) GPRA05 EERE (US)

EIA Reference (US)

Source:NREL

35

All Renewables Targets Commitment% Total Renewables

0%

10%

20%

30%

40%

50%

60%

1990 2000 2010 2020 2030 2040 2050 2060

Global Perspectives A3 Germany

Today (Global) IEA World Energy Outlook Ref

Shell Dynamics (Global) European Union

Navigant (Global) Today (US)

Pew Tech Triumphs Policy (US) Aitkin (US)

GHG (Hoffert) GPRA05 EERE (US)

EIA Reference (US)

36

American Council On Renewable Energy

37

ACOREÕs Convening Role

¥ ÒRenewable Energy in AmericaÓÐ Annual ConferenceÐ National policyÐ July 2003, Washington DC

¥ ÒPower-Gen Renewable EnergyÓÐ Trade showÐ Customer focusedÐ JV with Pennwell CommunicationsÐ Las Vegas and OrlandoÐ March 1-3, 2004, Las Vegas

¥ ÒRenewable Energy FinanceForumÓ

Ð High level finance conferenceÐ JV with EuromoneyÐ June 23-24, 2004, New York City

ACOREÕs Organizing Conference, July 2002

Jim Woolsey and Boyden Gray Amory Lovins

38

Renewable Energy FinanceForum Ð Wall Street June

23-24, 2004New York City

Keynote:George E Pataki, Governor ofNew YorkSean Harrigan, President,CalPERS

Sessions on:Corporate commitmentsProject debtProject equityCarbon financeVenture capitalInstitutional investorsPublic policy driversGreen building finance

39

Additional Information

American Council On Renewable Energy

Michael Eckhart, PresidentTelephone: 01-202-429-2030

meckhart@AmericanRenewables.org

Rob Pratt, ChairmanKen Locklin, Co-Chair, Finance Committee

Wolfgang Palz, Co-Chair, International CommitteeJudy Siegel, Co-Chair, International Committee

Peter Varadi, Liaison to International Advisory Board

www.AmericanRenewables.org